ICBC increase in loans especially for logistics

     Railway infrastructure

Industrial and Commercial Bank of China (ICBC) recorded a huge increase in new loans in January as it answered government calls to support the weakening economy. ICBC, the country's largest bank, said it extended RMB117.1 billion ($17 billion) of new loans last month, 22% of the amount for the whole of 2008.

RMB69.3 billion, or 59% of the total, was lent to infrastructure projects including railways, roads, power grid and nuclear power stations.

Late last year China urged local lenders to increase credit to support its RMB4 trillion (US$586 billion) stimulus package aimed at spurring economic growth.

China View reports that China's economy grew 6.8% year-on-year in the fourth quarter of last year, down from 9% in the third quarter and 10.4% in the first half. The sharp slowdown dragged down the growth for 2008 to a 7-year-low of 9%.

The bank also reported a big profit and declines in both the amount of non-performing loans (NPLs) and the NPL ratio in January, though no specific figures were given.

The big increase in new loans showed the government measures have yielded initial results and the positive effects are spreading to the real economy expecially to logistics and transport.

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